What Does The Amending Of The EPF Scheme Mean?
Jun 01, 2017 Home Trading Steps
Using our provident fund (PF) to buy a property is one of the easiest ways to fulfil the dream. Since the Labour Minister Bandaru Dattatreya has given a written reply to the Rajya Sabha that his government is planning to allow the retirement fund body to use the 90 percent of their PF money to buy a property, the subscribers of employment provident fund organisation (EPFO) have a reason to celebrate.
Finding and saving money to fund the loan down payment is difficult. And if the buyers are able to use their provident money to buy their dream house, it is a win - win situation.
‘The government has taken a decision for modification in employment fund scheme (EPF), 1952, and add a new paragraph 68 BD’, the labour minister Bandaru Dattatreya has written it in the letter.
The EPF subscribers can take the loan 24 times the amount of their salary. The salary includes basic salary and dearness allowance. For example, if your income if Rs 50,000 per month then you can avail a loan of 12 lakhs from the EPFO.
Once the paragraph is added to the scheme, the buyers will be able to pay their EMIs with the EPFO money. It will become easier for the buyers to pay their EMIs and also pay their down payment.
With the increasing prices of properties, the interest of the buyers is decreasing towards the real estate. This will help the potential buyers to take a further step towards the property buying, and pay the amount using their provident fund account.
However, to avail the scheme, the buyers will have to fulfil certain condition:
1. To start with, the buyers will need to have a PF account for at least five years; it won’t be granted if the PF account does not exist any less than five years.
2. For the salaried persons, their employer will have to verify their application and send it to the local EPF office. The approval may take longer than expected. Hence, it is advised to not change your employer and join other company while the application is in the process.
3. More paper work will be involved. Make sure you go through them properly and fulfil all the requirements and submit all the documents necessary.
Experts always point out that the buyers should only use their PF money in case of emergency and therefore keep it safe in the bank rather than invest in property.
Finding and saving money to fund the loan down payment is difficult. And if the buyers are able to use their provident money to buy their dream house, it is a win - win situation.
‘The government has taken a decision for modification in employment fund scheme (EPF), 1952, and add a new paragraph 68 BD’, the labour minister Bandaru Dattatreya has written it in the letter.
The EPF subscribers can take the loan 24 times the amount of their salary. The salary includes basic salary and dearness allowance. For example, if your income if Rs 50,000 per month then you can avail a loan of 12 lakhs from the EPFO.
Once the paragraph is added to the scheme, the buyers will be able to pay their EMIs with the EPFO money. It will become easier for the buyers to pay their EMIs and also pay their down payment.
With the increasing prices of properties, the interest of the buyers is decreasing towards the real estate. This will help the potential buyers to take a further step towards the property buying, and pay the amount using their provident fund account.
However, to avail the scheme, the buyers will have to fulfil certain condition:
1. To start with, the buyers will need to have a PF account for at least five years; it won’t be granted if the PF account does not exist any less than five years.
2. For the salaried persons, their employer will have to verify their application and send it to the local EPF office. The approval may take longer than expected. Hence, it is advised to not change your employer and join other company while the application is in the process.
3. More paper work will be involved. Make sure you go through them properly and fulfil all the requirements and submit all the documents necessary.
Experts always point out that the buyers should only use their PF money in case of emergency and therefore keep it safe in the bank rather than invest in property.
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